ECO101H1 Lecture : The Economics Way of Thinking
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ECO101H1 Full Course Notes
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Topic 1 - the economic way of thinking (week one sep 13th j sep 17th) Economics: the study of how rational people make choices; the study of how society managers its scarce resources; Scarcity leads to choices leads to economics (the study of making choices): opportunity cost: what one forgoes by not taking the best next alternative; whatever must be given up to obtain some item; Opportunity cost = tuitions/books + forgone earnings = +,000. Oc=ticket price + forgone earnings = + = ; b). the next best alternative is going for a walk. Now should one continues operating the hotdog stand if: a). Since medical doctors are the highest-earning professions in canada, the opportunity cost of their time is too high for them operate hotdog stands. In dec 1990, an ontario university predicts its first year enrollment to be 25,000; In spring 1991, the economy enters a deep recession, and employment drops greatly;